EXHIBIT 10.1
CREDIT AGREEMENT
(LINE OF CREDIT)
(FOREIGN EXCHANGE)
(LETTER OF CREDIT SUB-FACILITY)
This Agreement (the "Agreement") is made and entered into as of JULY 20,
2006, by and between BANK OF THE WEST (the "Bank") and VOLCOM, INC. (the
"Borrower"), on the terms and conditions that follow:
SECTION
1
DEFINITIONS
1.1 CERTAIN DEFINED TERMS: Unless elsewhere defined in this Agreement, the
following terms shall have the following meanings (such meanings to be
generally applicable to the singular and plural forms of the terms
defined):
1.1.1 "ADVANCE": shall mean an advance to the Borrower under the
Agreement described in Section 2.
1.1.2 "BUSINESS DAY": shall mean a day, other than a Saturday or
Sunday, on which commercial banks are open for business in
California.
1.1.3 "CLOSE-OUT DATE": shall mean the Business Day on which the Bank
closes out and liquidates an FX Transaction.
1.1.4 "CLOSING VALUE": has the meaning given to it in Section 7.5(i)
hereof.
1.1.5 "CLOSING GAIN" AND "CLOSING LOSS": shall mean the amount
determined in accordance with Section 7.5(ii) hereof.
1.1.6 "CREDIT PERCENTAGE": shall mean 10%.
1.1.7 "CURRENT LIABILITIES": shall mean current liabilities as
determined in accordance with generally accepted accounting
principles, including any negative cash balance on the
Borrower's financial statement and Indebtedness for borrowed
money under lines of credit with the Bank used by the Borrower
for working capital purposes.
1.1.8 "EFFECTIVE TANGIBLE NET WORTH": shall mean the Borrower's
(including all subsidiaries) stated net worth plus Subordinated
Debt but less all intangible assets of the Borrower (i.e.,
goodwill, trademarks, patents, copyrights, organization expense,
and similar intangible items including, but not limited to,
investments in and all amounts due from affiliates, officers or
employees).
1.1.9 "ENVIRONMENTAL CLAIMS": shall mean all claims, however asserted
provided it is in writing, by any governmental authority or
other person alleging potential liability or responsibility for
violation of any Environmental Law or for discharge or injury to
the environment or threat to public health, personal injury
(including sickness, disease or death), property damage,
natural resources damage, or otherwise alleging liability or
responsibility for damages (punitive or otherwise), cleanup,
removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of relief,
resulting from or based upon (a) the presence, placement,
discharge, emission or release (including intentional and
unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental placement, spills,
leaks, Discharges, emissions or releases) of any Hazardous
Material at, in, or from property, whether or not owned by the
Borrower, or (b) any other circumstances forming the basis of
any violation, or alleged violation, of any Environmental Law.
1.1.10 "ENVIRONMENTAL LAWS": shall mean all federal, state or local
laws, statutes, common law duties, rules, regulations,
ordinances and codes, together with all administrative orders,
directed duties, requests, licenses, authorizations and permits
of, and agreements with, any governmental authorities, in each
case relating to environmental, health, safety and land use
matters; including but not limited to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Clean Air Act, the Federal Water Pollution
Control Act of 1972, the Solid Waste Disposal Act, the Federal
Resource Conservation and Recovery Act, the Toxic Substances
Control Act, the Emergency Planning and Community Right-to-Know
Act, the California Hazardous Waste Control Law, the California
Solid Waste Management, Resource, Recovery and Recycling Act,
the California Water Code and the California Health and Safety
Code.
1.1.11 "ENVIRONMENTAL PERMITS": shall have the meaning provided in
Section 4.10 hereof.
1.1.12 "ERISA": shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, including (unless the
context otherwise requires) any rules or regulations promulgated
thereunder.
1.1.13 "EVENT OF DEFAULT": shall have the meaning set forth in Section
6 of this Agreement.
1.1.14 "EXPIRATION DATE": shall mean August 31, 2008, or the date of
termination of the Bank's commitment to lend under this
Agreement pursuant to Section 7, whichever shall occur first.
1.1.15 "FOREIGN CURRENCY": shall mean any legally traded currency other
than US dollars and which may be transferred by paperless wire
transfer or cash and in which the Bank regularly trades.
1.1.16 "FOREIGN EXCHANGE FACILITY": shall mean the credit facility
described as such in Section 2.
1.1.17 "FX RISK LIABILITY": shall mean the product of (a) the Credit
Percentage, times (b) the aggregate of the Notional Values of
all FX Transactions outstanding, net of any Offsetting
Transactions.
1.1.18 "FX LIMIT": shall mean $1,500,000.
1.1.19 "FX TRANSACTION": shall mean any transaction between the Bank
and the Borrower pursuant to which the Bank has agreed to sell
to or to purchase from the Borrower a Foreign Currency of an
agreed amount at an agreed price in US dollars or such other
agreed upon Foreign Currency, deliverable and payable on an
agreed date.
1.1.20 "HAZARDOUS MATERIALS": shall mean all those substances which are
regulated by, or which form the basis of liability under, any
Environmental Law, including all substances identified under any
Environmental Law as a pollutant, contaminant, hazardous waste,
hazardous
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constituent, special waste, hazardous substance, hazardous
material, or toxic substance, or petroleum or petroleum derived
substance or waste.
1.1.21 "INDEBTEDNESS": shall mean, with respect to the Borrower, (i)
all indebtedness for borrowed money or for the deferred purchase
price of property or services for which is deferred six months
or more in respect of which the Borrower is liable, contingently
or otherwise, as obligor, guarantor or otherwise, or in respect
of which the Borrower otherwise assures a creditor against loss
but excluding obligations to trade creditors incurred in the
ordinary course of business and (ii) obligations under leases
which shall have been or should be, in accordance with generally
accepted accounting principles, reported as capital leases in
respect of which the Borrower is liable, contingently or
otherwise, or in respect of which the Borrower otherwise assures
a creditor against loss. The word "Indebtedness" also includes
expenses incurred by the Bank to enforce obligations of the
Borrower under this Agreement, together with interest on such
amounts as provided in this Agreement, and all other
obligations, debts, and liabilities of the Borrower to the Bank
as well as all claims by the Bank against the Borrower that are
now or hereafter existing, voluntary or involuntary, due or not
due, absolute or contingent, liquidated or unliquidated, whether
the Borrower may be liable individually or jointly with others,
whether recovery upon such Indebtedness may be or hereafter may
become barred by any statute of limitations, and whether such
Indebtedness may be or hereafter may become otherwise
unenforceable.
1.1.22 "LETTER OF CREDIT FACILITY": shall mean the credit facility
described as such in Section 2 hereof.
1.1.23 "LIBOR ADVANCE": shall have the respective meaning as it is
defined for each facility under Section 2, hereof.
1.1.24 "LIBOR INTEREST PERIOD": shall have the respective meaning as it
is defined for each facility under Section 2, hereof.
1.1.25 "LIBOR RATE": shall have the respective meaning as it is defined
for each facility under Section 2, hereof.
1.1.26 "LINE ACCOUNT": shall have the meaning provided in Section 2.4
hereof.
1.1.27 "LINE OF CREDIT": shall mean the credit facility described as
such in Section 2.
1.1.28 "NOTIONAL VALUE": shall mean the US Dollar equivalent of the
price at which the Bank agreed to purchase or sell to the
Borrower a Foreign Currency.
1.1.29 "OBLIGATIONS": shall mean all amounts owing by the Borrower to
the Bank pursuant to this Agreement including, but not limited
to, the unpaid principal amount of any loans or advances.
1.1.30 "OFFSETTING TRANSACTION": shall mean a FX Transaction to
purchase a Foreign Currency and a FX Transaction to sell the
same Foreign Currency , each with the same Settlement Date and
designated as an Offsetting Transaction at the time of entering
into the FX Transaction.
1.1.31 "ORDINARY COURSE OF BUSINESS": shall mean, with respect to any
transaction involving the Borrower or any of its subsidiaries or
affiliates, the ordinary course of the Borrower's business, as
conducted by the Borrower in accordance with past practice or
industry custom or practice.
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1.1.32 "PERMITTED LIENS": shall mean: (i) liens and security interests
securing indebtedness owed by the Borrower to the Bank; (ii)
liens for taxes, assessments or similar charges not yet due;
(iii) liens of materialmen, mechanics, warehousemen, or carriers
or other like liens arising in the Ordinary Course of Business
and securing obligations which are not yet delinquent; (iv)
purchase money liens or purchase money security interests upon
or in any property acquired or held by the Borrower in the
Ordinary Course of Business to secure Indebtedness outstanding
on the date hereof or permitted to be incurred herein; (v) liens
and security interests which, as of the date hereof, have been
disclosed to and approved by the Bank in writing; and (vi) those
liens and security interests which in the aggregate do not
constitute a material monetary amount with respect to the net
value of the Borrower's assets.
1.1.33 "PRIME RATE": shall mean an index for a variable interest rate
which is quoted, published or announced by Bank as its prime
rate and as to which loans may be made by Bank at, above or
below such rate.
1.1.34 "SETTLEMENT DATE": shall mean the Business Day on which the
Borrower has agreed to (a) deliver the required amount of
Foreign Currency, or (b) pay in US dollars the agreed upon
purchase price of the Foreign Currency.
1.1.35 "SUBORDINATED DEBT": shall mean such liabilities of the Borrower
which have been subordinated to those owed to the Bank in a
manner acceptable to the Bank.
1.1.36 "VARIABLE RATE ADVANCE": shall have the respective meaning as it
is defined for each facility under Section 2, hereof.
1.1.37 "VARIABLE RATE": shall have the respective meaning as it is
defined for each facility under Section 2, hereof.
1.2 ACCOUNTING TERMS: All references to financial statements, assets,
liabilities, and similar accounting items not specifically defined
herein shall mean such financial statements or such items prepared or
determined in accordance with generally accepted accounting principles
consistently applied and, except where otherwise specified, all
financial data submitted pursuant to this Agreement shall be prepared in
accordance with such principles.
1.3 OTHER TERMS: Other terms not otherwise defined shall have the meanings
attributed to such terms in the Uniform Commercial Code as in effect on
July 1, 2001 and from time to time thereafter.
SECTION
2
CREDIT FACILITIES
2.1 THE LINE OF CREDIT
2.1.1 THE LINE OF CREDIT: On terms and conditions as set forth herein,
the Bank agrees to make Advances to the Borrower from time to
time from the date hereof to the Expiration Date, provided the
aggregate amount of such Advances outstanding at any time does
not exceed $20,000,000.00 (the "Line of Credit"). Within the
foregoing limits, the Borrower may borrow, partially or wholly
prepay, and reborrow under this Section 2.1. Proceeds of the
Line of Credit shall be used for general working capital needs,
including loans and advances to subsidiaries; provided, however,
that up to $10,000,000.00 of the Line of Credit may also be used
for the acquisitions.
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2.1.2 MAKING LINE ADVANCES: Each Advance shall be conclusively deemed
to have been made at the request of and for the benefit of the
Borrower (i) when credited to any deposit account of the
Borrower maintained with the Bank or (ii) when paid in
accordance with the Borrower's written instructions. Subject to
the requirements of Section 3 and provided such request is made
in a timely manner as provided in Section 2.1.5 below, Advances
shall be made by the Bank under the Line of Credit.
2.1.3 REPAYMENT: On the Expiration Date, the Borrower hereby promises
and agrees to pay to the Bank in full the aggregate unpaid
principal amount of all Advances then outstanding, together with
all accrued and unpaid interest thereon.
2.1.4 INTEREST ON ADVANCES: Interest shall accrue from the date of
each Advance under the Line of Credit at one of the following
rates, as quoted by the Bank and as elected by the Borrower
below:
(i) Variable Rate Advances: A variable rate per annum
equivalent to the Prime Rate (the "Variable Rate").
Interest shall be adjusted concurrently with any change
in the Prime Rate. An Advance based upon the Variable
Rate is hereinafter referred to as a "Variable Rate
Advance".
(ii) LIBOR Advances: A fixed rate quoted by the Bank for 1 to
6 months or for such other period of time that the Bank
may quote and offer (provided that any such period of
time does not extend beyond the Expiration Date) (the
"LIBOR Interest Period") for Advances in the minimum
amount of $100,000.00. Such interest rate shall be a
percentage approximately equivalent to 1.50% in excess
of the Bank's LIBOR Rate which is that rate determined
by the Bank's Treasury Desk as being the arithmetic mean
(rounded upwards, if necessary, to the nearest whole
multiple of one-sixteenth of one percent (1/16%)) of the
U. S. dollar London Interbank Offered Rates for such
period appearing on page USD (or such other page as may
replace page USD) of the Bloomberg Financial Markets
screen at or about 10:00 a.m. (New York Time) on the
second Business Day prior to the first day of such
period (adjusted for any and all assessments, surcharges
and reserve requirements) (the "LIBOR Rate"). An Advance
based upon the LIBOR Rate is hereinafter referred to as
a "LIBOR Advance".
Interest on any Advance shall be computed on the basis of 360
days per year, but charged on the actual number of days elapsed.
The Borrower hereby promises and agrees to pay interest in
arrears on Variable Rate Advances and LIBOR Advances on the last
calendar day of each month.
If interest is not paid as and when it is due, it shall be added
to the principal, become and be treated as a part thereof, and
shall thereafter bear like interest.
2.1.5 NOTICE OF BORROWING: Upon written or telephonic notice which
shall be received by the Bank at or before 2:00 p.m. (Pacific
time) on a Business Day, the Borrower may borrow under the Line
of Credit by requesting:
(i) A Variable Rate Advance. A Variable Rate Advance may be
made on the day notice is received by the Bank;
provided, however, that if the Bank shall not have
received notice at or before 2:00 p.m. on the day such
Advance is requested to be made, such Variable Rate
Advance may, at the Bank's option, be made on the next
Business Day.
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(ii) A LIBOR Advance. Notice of any LIBOR Advance shall be
received by the Bank no later than two Business Days
prior to the day (which shall be a Business Day) on
which the Borrower requests such LIBOR Advance to be
made.
2.1.6 NOTICE OF ELECTION TO ADJUST INTEREST RATE: The Borrower may
elect:
(i) That interest on a Variable Rate Advance shall be
adjusted to accrue at the LIBOR Rate; provided, however,
that such notice shall be received by the Bank no later
than two Business Days prior to the day (which shall be
a Business Day) on which the Borrower requests that
interest be adjusted to accrue at the LIBOR Rate.
(ii) That interest on a LIBOR Advance shall continue to
accrue at a newly quoted LIBOR Rate or shall be adjusted
to commence to accrue at the Variable Rate; provided,
however, that such notice shall be received by the Bank
no later than two Business Days prior to the last day of
the LIBOR Interest Period pertaining to such LIBOR
Advance. If the Bank shall not have received notice (as
prescribed herein) of the Borrower's election that
interest on any LIBOR Advance shall continue to accrue
at the newly quoted LIBOR Rate, the Borrower shall be
deemed to have elected that interest thereon shall be
adjusted to accrue at the Variable Rate upon the
expiration of the LIBOR Interest Period pertaining to
such Advance.
2.1.7 PREPAYMENT: The Borrower may prepay any Advance in whole or in
part, at any time and without penalty, provided, however, that:
(i) any partial prepayment shall first be applied, at the Bank's
option, to accrued and unpaid interest and next to the
outstanding principal balance; and (ii) during any period of
time in which interest is accruing on any Advance on the basis
of the LIBOR Rate, no prepayment shall be made except on a day
which is the last day of the LIBOR Interest Period pertaining
thereto. If the whole or any part of any LIBOR Advance is
prepaid by reason of acceleration or otherwise, the Borrower
shall, upon the Bank's request, promptly pay to and indemnify
the Bank for all costs, expenses and any loss (including loss of
profit resulting from the re-employment of funds) sustained by
the Bank as a direct consequence of such prepayment.
The Bank shall be entitled to fund all or any portion of its
Advances in any manner it may determine in its sole discretion,
but all calculations and transactions hereunder shall be
conducted as though the Bank actually funded all Advances
through the purchase of dollar deposits bearing interest at the
same rate as U.S. Treasury securities in the amount of the
relevant Advance and in maturities corresponding to the date of
such purchase to the Expiration Date hereunder.
2.1.8 INDEMNIFICATION FOR LIBOR RATE COSTS: During any period of time
in which interest on any Advance is accruing on the basis of the
LIBOR Rate, the Borrower shall, upon the Bank's request,
promptly pay to and reimburse the Bank for all costs incurred
and payments made by the Bank by reason of any future
assessment, reserve, deposit or similar requirement or any
surcharge, tax or fee imposed upon the Bank or as a result of
the Bank's compliance with any directive or requirement of any
regulatory authority pertaining or relating to funds used by the
Bank in quoting and determining the LIBOR Rate.
2.1.9 CONVERSION FROM LIBOR RATE TO VARIABLE RATE: In the event that
the Bank shall at any time determine that the accrual of
interest on the basis of the LIBOR Rate (i) is infeasible
because the Bank is unable to determine the LIBOR Rate due to
the unavailability of U.S. dollar deposits, contracts or
certificates of deposit in an amount approximately equal to the
amount of the relevant Advance and for a period of time
approximately equal to relevant LIBOR Interest Period or (ii) is
or has become unlawful or infeasible by reason of the Bank's
compliance with any new law, rule, regulation, guideline or
order, or any new interpretation of any present law, rule,
regulation, guideline or order, then the Bank shall
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give telephonic notice thereof (confirmed in writing) to the
Borrower, in which event any Advance bearing interest at the
LIBOR Rate shall be deemed to be a Variable Rate Advance and
interest shall thereupon immediately accrue at the Variable
Rate.
2.2 LETTER OF CREDIT SUB-FACILITY
2.2.1 LETTER OF CREDIT SUB-FACILITY: The Bank agrees to issue standby
letters of credit (each a "Letter of Credit") on behalf of the
Borrower of up to $10,000,000.00. At no time, however, shall the
total principal amount of all Advances outstanding under the
Line of Credit, together with the total face amount of all
Letters of Credit outstanding, less any partial draws paid by
the Bank, exceed the Line of Credit.
For the purposes hereof, any Letters of Credit issued and
outstanding for the account of the Borrower as of the date
hereof shall be deemed to be issued hereunder.
(i) Upon the Bank's request, the Borrower shall promptly pay
to the Bank issuance fees and such other customary fees,
commissions, costs and any out-of-pocket expenses
charged or incurred by the Bank with respect to any
Letter of Credit.
(ii) The commitment by the Bank to issue Letters of Credit
shall, unless earlier terminated in accordance with the
terms of the Agreement, automatically terminate on the
Expiration Date of the Line of Credit and no Letter of
Credit shall expire on a date which is more than 90 days
after the Expiration Date.
(iii) Each Letter of Credit shall be in form and substance
satisfactory to the Bank and in favor of beneficiaries
reasonably satisfactory to the Bank, provided that the
Bank may refuse to issue a Letter of Credit due to the
nature of the transaction or its terms or in connection
with any transaction where the Bank, due to the
beneficiary or the nationality or residence of the
beneficiary, would be prohibited by any applicable law,
regulation or order from issuing such Letter of Credit.
(iv) Prior to the issuance of each Letter of Credit, but in
no event later than 10:00 a.m. (California time) on the
day such Letter of Credit is to be issued (which shall
be a Business Day), the Borrower shall deliver to the
Bank a duly executed form of the Bank's standard form of
application for issuance of a Letter of Credit with
proper insertions.
(v) The Borrower shall, upon the Bank's request, promptly
pay to and reimburse the Bank for all costs incurred and
payments made by the Bank by reason of any future
assessment, reserve, deposit or similar requirement or
any surcharge, tax or fee imposed upon the Bank or as a
result of the Bank's compliance with any directive or
requirement of any regulatory authority pertaining or
relating to any Letter of Credit.
In the event that the Borrower fails to pay any drawing under any Letter
of Credit or the balances in the depository account or accounts
maintained by the Borrower with Bank are insufficient to pay such
drawing, without limiting the rights of Bank hereunder or waiving any
Event of Default caused thereby, Bank may, and Borrower hereby
authorizes Bank to create an Advance bearing interest at the rate or
rates provided in Section 8.2 hereof to pay such drawing.
2.3 FOREIGN EXCHANGE FACILITY
2.3.1 FOREIGN EXCHANGE FACILITY: The Bank agrees to enter into FX
Transactions with the Borrower, at the Borrower's request
therefor made prior to the Expiration Date, provided however,
that at no time shall the aggregate FX Risk Liability of the
Borrower exceed the
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FX Limit. Each FX Transaction shall be used to hedge the
Borrower's foreign exchange exposure.
(i) REQUESTS. Each request for a FX Transaction shall be
made by telephone to the Bank's Treasury Department
("Request"), shall specify the Foreign Currency to be
purchased or sold, the amount of such Foreign Currency
and the Settlement Date. Each Request shall be
communicated to the Bank no later than 3:00 p.m.
California time on the Business Day on which the FX
Transaction is requested.
(ii) TENOR. No FX Transaction shall have a Settlement Date
which is more than 365 days after the date of entry into
such FX Transaction, and provided further, no FX
Transaction shall expire on a date which is more than 90
days after the Expiration Date.
(iii) AVAILABILITY. Bank may refuse to enter into a FX
Transaction with the Borrower where the Bank, at its
sole discretion, determines that (1) the requested
Foreign Currency is unavailable, or (2) the Bank is not
then dealing in the requested Foreign Currency, or (3)
the Bank would be prohibited by any applicable law,
rule, regulation or order from purchasing such Foreign
Currency.
(iv) PAYMENT. Payment is due on the Settlement Date of the
relevant FX Transaction. The Bank is hereby authorized
by the Borrower to charge the full settlement price of
any FX Transaction against the depository account or
accounts maintained by the Borrower with the Bank on the
Settlement Date. In the event that the Borrower fails to
pay the settlement price of any FX Transaction on the
Settlement Date or the balances in the depository
account or accounts maintained with Bank are
insufficient to pay the settlement price, without
limiting the rights of Bank hereunder or waiving any
Event of Default caused thereby, Bank may , and Borrower
hereby authorizes Bank to, create an Advance bearing
interest at the Variable Rate to pay the settlement
price on the Settlement Date.
(v) INCREASED COSTS. Borrower shall promptly pay to and
reimburse the Bank for all costs incurred and payments
made by the Bank by reason of any assessment, reserve,
deposit, capital maintenance or similar requirement or
any surcharge, tax or fee imposed upon the Bank or as a
result of the Bank's compliance with any directive or
requirement of any regulatory authority pertaining or
relating to any FX Transaction.
(vi) IMPOSSIBILITY OF PERFORMANCE. In the event that the
Borrower or the Bank cannot perform under a FX
Transaction due to force majeure or an act of State or
it becomes unlawful or impossible to perform, all in the
good faith judgement of the Borrower or the Bank, then
upon notice to the other party, the Borrower or the Bank
may require the close-out and liquidation of the
affected FX Transaction in accordance with the
provisions of this Agreement.
2.4 LINE ACCOUNT: The Bank shall maintain on its books a record of account
in which the Bank shall make entries for each Advance and such other
debits and credits as shall be appropriate in connection with the credit
facilities granted hereunder (the "Line Account"). The Bank shall
provide the Borrower with a statement of the Borrower's Line Account,
which statement shall be considered to be correct and conclusively
binding on the Borrower unless the Borrower notifies the Bank to the
contrary within 60 days after the Borrower's receipt of any such
statement which it deems to be incorrect.
2.5 LATE PAYMENT: In addition to any other rights the Bank may have
hereunder, if any payment of principal or interest or any portion
thereof, under this Agreement is not paid within 15 days of when due, a
late payment charge equal to five percent (5%) of such past due payment
may be assessed and shall be immediately payable.
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SECTION
3
CONDITIONS PRECEDENT
3.1 CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT: The obligation
of the Bank to make the initial Advance or the first extension of credit
to or on account of the Borrower hereunder is subject to the conditions
precedent that the Bank shall have received before the date of such
initial Advance or such first extension of credit all of the following,
in form and substance satisfactory to the Bank:
(i) AUTHORITY TO BORROW. Evidence that the execution,
delivery and performance by the Borrower of this
Agreement and any document, instrument or agreement
required hereunder have been duly authorized.
(ii) FEES. Payment of all of the Bank's reasonable
out-of-pocket expenses in connection with the
preparation and negotiation of this Agreement. The bank
shall provide written notice to the Borrower for any
fees of more than $500.00 and shall discuss the
retention of outside counsel with the Company prior to
such counsel performing any work that will be billed to
Borrower.
(iii) MISCELLANEOUS. Such other evidence as the Bank may
reasonably request to establish the consummation of the
transaction contemplated hereunder and compliance with
the conditions of this Agreement.
3.2 CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT: The obligation of the
Bank to make each Advance or each other extension of credit, as the case
may be, to or on account of the Borrower (including the initial Advance
or the first extension of credit) shall be subject to the further
conditions precedent that, on the date of each Advance or each extension
of credit and after the making of such Advance or extension of credit:
(i) REPORTING REQUIREMENTS. The Bank shall have received the
documents set forth in Section 5.1.
(ii) REPRESENTATIONS AND WARRANTIES. The representations
contained in Section 4, except for representation and
warranties dating specifically to an earlier date and in
any other document, instrument or certificate delivered
to the Bank hereunder are true, correct and complete in
all material respects.
(iii) EVENT OF DEFAULT. No event has occurred and is
continuing which constitutes, or with the lapse of time
or giving of notice or both, would constitute an Event
of Default.
The Borrower's acceptance of the proceeds of any loan, Advance or extension of
credit, or the Borrower's applying for any Letter of Credit, or the Borrower's
execution of any document or instrument evidencing or creating any Obligation
hereunder shall be deemed to constitute the Borrower's representation and
warranty that all of the above statements are true and correct.
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SECTION
4
REPRESENTATIONS AND WARRANTIES
The Borrower hereby makes the following representations and warranties to the
Bank, which representations and warranties are continuing:
4.1 STATUS: The Borrower's correct legal name is as stated in this Agreement
and the Borrower is a corporation duly organized and validly existing
under the laws of Delaware and with its chief executive office in the
state of California. The Borrower is qualified to do business and in
good standing under the laws of the state of Delaware and is qualified
to do business and is in good standing in the state of California.
4.2 AUTHORITY: The execution, delivery and performance by the Borrower of
this Agreement and any instrument, document or agreement required
hereunder have been duly authorized and do not and will not: (i) violate
any federal or California statute, rule or regulation or provision of
the DGCL, in each case, applicable to the Borrower; (ii) result in a
breach of or constitute a default under any material indenture or loan
or credit agreement or other material agreement, lease or instrument to
which the Borrower is a party or by which it or its properties may be
bound or affected; or (iii) require any consent or approval of its
stockholders or violate any provision of its certificate of
incorporation or by-laws.
4.3 LEGAL EFFECT: This Agreement constitutes, and any instrument, document
or agreement required hereunder when delivered hereunder will
constitute, legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with its terms.
4.4 FINANCIAL STATEMENTS: All financial statements, information and other
data which may have been or which may hereafter be submitted by the
Borrower to the Bank are true, accurate and correct in all material
respects, except as they may have been amended in public filings with
the U.S. Securities Exchange Commission, and have been or will be
prepared in accordance with generally accepted accounting principles
consistently applied and accurately represent the financial condition
or, as applicable, the other information disclosed therein. Since the
most recent submission of such financial information or data to the
Bank, the Borrower represents and warrants that no material adverse
change in the Borrower's financial condition or operations has occurred
which has not been fully disclosed to the Bank in writing.
4.5 LITIGATION: Except as have been disclosed to the Bank in writing, there
are no material actions, suits or proceedings pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower
or the Borrower's properties before any court or administrative agency,
which, if determined adversely to the Borrower, would have a material
adverse effect on the Borrower's financial condition.
4.6 TITLE TO ASSETS: The Borrower has good and marketable title to all of
its assets and the same are not subject to any security interest,
encumbrance, lien or claim of any third person except for Permitted
Liens.
4.7 ERISA: If the Borrower has a pension, profit sharing or retirement plan
subject to ERISA, such plan has been and will continue to be funded in
accordance with its terms and otherwise complies with and continues to
comply with the requirements of ERISA.
4.8 TAXES: Except where the failure to do so will not result in a material
adverse effect on the Borrower, the Borrower has filed all tax returns
required to be filed and paid all taxes shown thereon to be due,
including interest and penalties, other than such taxes which are
currently payable
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without penalty or interest or those which are being duly contested in
good faith or which payment could not reasonably cause a change in the
Borrower's financial condition.
4.9 MARGIN STOCK. The proceeds of any loan or advance hereunder will not be
used to purchase or carry margin stock as such term is defined under
Regulation U of the Board of Governors of the Federal Reserve System.
4.10 ENVIRONMENTAL COMPLIANCE. The operations of the Borrower comply, and
during the term of this Agreement will at all times comply, in all
respects with all Environmental Laws; to the Borrower's best knowledge,
has obtained all licenses, permits, authorizations and registrations
required under any Environmental Law ("Environmental Permits") and
necessary for its ordinary course operations, all such Environmental
Permits are in good standing, and the Borrower is in compliance with all
material terms and conditions of such Environmental Permits; neither the
Borrower nor any of its present property or operations is subject to any
outstanding written order from or agreement with any governmental
authority nor subject to any judicial or docketed administrative
proceeding, respecting any Environmental Law, Environmental Claim or
Hazardous Material; there are no Hazardous Materials or other conditions
or circumstances existing, or arising from operations prior to the date
of this Agreement, with respect to any property of the Borrower that
would reasonably be expected to give rise to Environmental Claims;
provided, however, that with respect to property leased from an
unrelated third party, the foregoing representation is made to the
actual knowledge of the Borrower. In addition, (i) the Borrower does not
have any underground storage tanks that are not properly registered or
permitted under applicable Environmental Laws, or that are leaking or
disposing of Hazardous Materials off-site, and (ii) the Borrower has
notified all of their employees of the existence, if any, of any health
hazard arising from the conditions of their employment and have met all
notification requirements under Title III of CERCLA and all other
Environmental Laws.
SECTION
5
COVENANTS
The Borrower covenants and agrees that during the term of this Agreement, and so
long thereafter as the Borrower is indebted to the Bank under this Agreement,
the Borrower will, unless the Bank shall otherwise consent in writing:
5.1 REPORTING AND CERTIFICATION REQUIREMENTS: Deliver or cause to be
delivered to the Bank:
(i) Not later than 90 days after the end of each of the
Borrower's fiscal years or at such time as Borrow files
its Form 10-K with the Securities and Exchange
Commission, a copy of the Borrower's Form 10-K filed for
such year (If the Borrower has filed its Form 10-K with
the Securities and Exchange Commission electronically
via XXXXX (or other similar electronic filing system,
Borrower shall not be obligated to provide a hard copy
of its Form 10-K to the Bank).
(ii) Not later than 45 days after the end of each fiscal
quarter or at such time as Borrower files its Form 10-Q
with the Securities and Exchange Commission, a copy of
the Borrower's Form 10-Q filed for such period (If the
Borrower has filed its Form 10-Q with the Securities and
Exchange Commission electronically via XXXXX (or other
similar electronic filing system, Borrower shall not be
obligated to provide a hard copy of its Form 10-K to the
Bank).
(iii) Concurrently with the delivery of the financial reports
required hereunder, a compliance certificate in form and
detail satisfactory to the Bank stating that the
Borrower is in compliance with all covenants contained
herein and that no Event of
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Default has occurred or is continuing, and certified to
by the chief financial officer or VP- Finance of the
Borrower.
(iv) Promptly upon the Bank's request, such other information
pertaining to the Borrower, as the Bank may reasonably
request.
5.2 FINANCIAL CONDITION: The Borrower promises and agrees, during the term
of this Agreement and until payment in full of all of the Borrower's
Obligations, the Borrower will maintain at all times:
(i) A minimum Effective Tangible Net Worth of at least
$90,000,000.00.
(ii) A ratio of the sum of cash, cash equivalents and
accounts receivable to Current Liabilities of not less
than 1.0 to 1.
(iii) A minimum net profit after tax and payment of dividends
of at least $2,000,000.00 at each fiscal year end.
5.3 PRESERVATION OF EXISTENCE; COMPLIANCE WITH APPLICABLE LAWS: Maintain and
preserve its existence and all rights and privileges now enjoyed; and
conduct its business and operations in accordance with all applicable
laws, rules and regulations, except where failure to do so will result
in a material adverse change to Borrower.
5.4 MERGE OR CONSOLIDATE: Not liquidate or dissolve, merge or consolidate
with or into any other business organization, provided however, that
this Section 5.4 shall not apply to transactions in which Borrower is
the surviving entity.
5.5 MAINTENANCE OF INSURANCE: Maintain insurance in such amounts and
covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same general
areas in which the Borrower operates and maintain such other insurance
and coverages as may be reasonably required by the Bank. All such
insurance shall be in form and amount and with companies reasonably
satisfactory to the Bank.
5.6 PAYMENT OF OBLIGATIONS AND TAXES: Except where failure to do so will
result in a material adverse change to Borrower, make timely payment of
all assessments and taxes and all of its liabilities and obligations
including, but not limited to, trade payables, unless the same are being
contested in good faith by appropriate proceedings with the appropriate
court or regulatory agency. For purposes hereof, the Borrower's issuance
of a check, draft or similar instrument without delivery to the intended
payee shall not constitute payment.
5.7 DEPOSITORY RELATIONSHIPS: Maintain its primary business depository
relationship with Bank, including general, operating and administrative
deposit accounts and cash management services.
5.8 INSPECTION RIGHTS AND ACCOUNTING RECORDS: The Borrower will maintain
adequate books and records in accordance with generally accepted
accounting principles consistently applied and in a manner otherwise
acceptable to Bank, and, at any reasonable time and from time to time,
permit the Bank or any representative thereof to examine and make copies
of the records and visit the properties of the Borrower and discuss the
business and operations of the Borrower with any employee or
representative thereof. If the Borrower shall maintain any records
(including, but not limited to, computer generated records or computer
programs for the generation of such records) in the possession of a
third party, the Borrower hereby agrees to notify such third party to
permit the Bank free access to such records at all reasonable times and
to provide the Bank with copies of any records which it may request, all
at the Borrower's expense, the amount of which shall be payable
immediately upon demand.
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5.9 ADDITIONAL INDEBTEDNESS: Not, after the date hereof, create, incur or
assume, directly or indirectly, any additional Indebtedness other than
(i) Indebtedness owed or to be owed to the Bank or (ii) Indebtedness to
trade creditors incurred in the Ordinary Course of Business or (iii)
Indebtedness of up to $5,000,000.00 in any one fiscal year.
5.10 LOANS: Except for credit extended in the Ordinary Course of Business,
not make any loans or advances or extend credit to any directors,
officers, members and partners of the Borrower and in no case extend
credit to any third person or employee in excess of an aggregate total
of $500,000.
5.11 LIENS AND ENCUMBRANCES: Not create, assume or permit to exist any
security interest, encumbrance, mortgage, deed of trust, or other lien
(including, but not limited to, a lien of attachment, judgment or
execution) affecting any of the Borrower's properties, or execute or
allow to be filed any financing statement or continuation thereof
affecting any of such properties, except for Permitted Liens or as
otherwise provided in this Agreement.
5.12 TRANSFER ASSETS: Not, after the date hereof, sell, contract for sale,
convey, transfer, assign, lease or sublet, any of its assets except in
the Ordinary Course of Business or wherein such action would not cause a
material adverse change to the Borrower's financial condition.
5.13 CHANGE IN NATURE OF BUSINESS: Not make any material change in its
financial structure or the nature of its business as existing or
conducted as of the date hereof.
5.14 MAINTENANCE OF JURISDICTION: Borrower shall maintain the jurisdiction of
its organization and chief executive office, or if applicable, principal
residence, as set forth herein and not change such jurisdiction name or
form of organization without 30 days prior written notice to Bank.
5.15 NOTICE: Give the Bank prompt written notice of any and all (i) Events of
Default; (ii) material litigation, arbitration or administrative
proceedings to which the Borrower is a party and in which the claim or
liability exceeds $10,000,000; (iii) other matters which have resulted
in, or might result in a material adverse change in the financial
condition or business operations of the Borrower, and (iv) any
enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened against the Borrower or any
of its properties.
5.16 ENVIRONMENTAL COMPLIANCE: The Borrower shall conduct its operations and
keep and maintain all of its property in compliance with all material
Environmental Laws and, upon the written request of the Bank, the
Borrower shall submit to the Bank, at the Borrower's sole cost and
expense, at reasonable intervals, a report providing the status of any
environmental, health or safety compliance, hazard or liability.
SECTION
6
EVENTS OF DEFAULT
Any one or more of the following described events shall constitute an
event of default (an "Event of Default") under this Agreement:
6.1 NON-PAYMENT: Any Borrower shall fail to pay the principal amount of any
Obligations when due or interest on the Obligations within 5 days of
when due.
6.2 PERFORMANCE UNDER THIS AGREEMENT: The Borrower shall fail in any
material respect to perform or observe any term, covenant or agreement
contained in this Agreement or in any document, instrument or agreement
relating to this Agreement or any other document or agreement executed
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by the Borrower with or in favor of Bank and any such failure shall
continue unremedied for more than 30 days after the occurrence thereof.
6.3 REPRESENTATIONS AND WARRANTIES; FINANCIAL STATEMENTS: Any representation
or warranty made by the Borrower under or in connection with this
Agreement or any financial statement given by the Borrower or any
guarantor shall prove to have been incorrect in any material respect
when made or given or when deemed to have been made or given.
6.4 OTHER AGREEMENTS: If there is a default under any agreement to which
Borrower is a party with Bank or with a third party or parties resulting
in a right by the Bank or by such third party or parties, whether or not
exercised, to accelerate the maturity of any Indebtedness, except where
such acceleration would not have a material adverse effect on the
Borrower.
6.5 INSOLVENCY: The Borrower or any guarantor shall: (i) become insolvent or
be unable to pay its debts as they mature; (ii) make an assignment for
the benefit of creditors or to an agent authorized to liquidate any
substantial amount of its properties and assets; (iii) file a voluntary
petition in bankruptcy or seeking reorganization or to effect a plan or
other arrangement with creditors; (iv) file an answer admitting the
material allegations of an involuntary petition relating to bankruptcy
or reorganization or join in any such petition; (v) become or be
adjudicated a bankrupt; (vi) apply for or consent to the appointment of,
or consent that an order be made, appointing any receiver, custodian or
trustee, for itself or any of its properties, assets or businesses; or
(vii) in an involuntary proceeding, any receiver, custodian or trustee
shall have been appointed for all or substantial part of the Borrower's
or guarantor's properties, assets or businesses and shall not be
discharged within 30 days after the date of such appointment.
6.6 EXECUTION: Any writ of execution or attachment or any judgment lien
shall be issued against any property of the Borrower and shall not be
discharged or bonded against or released within 30 days after the
issuance or attachment of such writ or lien.
6.7 SUSPENSION: The Borrower shall voluntarily suspend the transaction of
business or allow to be suspended, terminated, revoked or expired any
permit, license or approval of any governmental body necessary to
conduct the Borrower's business as now conducted, except where such
failure would not have a material adverse effect on the Borrower.
6.8 MATERIAL ADVERSE CHANGE: If there occurs a material adverse change in
the Borrower's business or financial condition, or if there is a
material impairment of the prospect of repayment of any portion of the
Obligations.
6.9 CHANGE IN OWNERSHIP: There shall occur a sale, transfer, disposition or
encumbrance (whether voluntary or involuntary to), or an agreement shall
be entered into to do so with, any Person or group of Persons (as such
terms are defined pursuant to Federal securities laws) with respect to
more than 50.1% of the issued and outstanding capital stock of the
Borrower and, as a result thereof, such Person or group of Persons has
the ability to direct or cause the direction of the management and
policies of the Borrower.
SECTION
7
REMEDIES ON DEFAULT
Upon the occurrence of any Event of Default, the Bank may, at its sole and
absolute election, without demand and only upon such notice as may be required
by law:
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7.1 ACCELERATION: Declare any or all of the Borrower's indebtedness owing to
the Bank, whether under this Agreement or any other document, instrument
or agreement, immediately due and payable, whether or not otherwise due
and payable.
7.2 CEASE EXTENDING CREDIT: Cease making Advances or otherwise extending
credit to or for the account of the Borrower under this Agreement or
under any other agreement now existing or hereafter entered into between
the Borrower and the Bank.
7.3 TERMINATION: Terminate this Agreement as to any future obligation of the
Bank without affecting the Borrower's obligations to the Bank or the
Bank's rights and remedies under this Agreement or under any other
document, instrument or agreement.
7.4 LETTERS OF CREDIT: Require the Borrower to pay immediately to the Bank,
for application against drawings under any outstanding Letters of
Credit, the outstanding principal amount of any such Letters of Credit
which have not expired. Any portion of the amount so paid to the Bank
which is not applied to satisfy draws under any such Letters of Credit
or any other obligations of the Borrower to the Bank shall be repaid to
the Borrower without interest.
7.5 CLOSE-OUT AND LIQUIDATION: Close-out and liquidate each outstanding FX
Transaction so that each FX Transaction is canceled in accordance with
the following:
(i) CLOSING VALUE. The Bank shall calculate value of such
canceled FX Transaction by converting (1) in the case of
a FX Transaction whose Settlement Date is the same as or
later than the Close-Out Date, the amount of Foreign
Currency into US dollars at a rate of exchange at which
the Bank can buy or sell US dollars with or against the
Foreign Currency for delivery on the Settlement Date of
the relevant FX Transaction; or (2) in the case of a FX
Transaction whose Settlement Date precedes the Close-Out
Date, the amount of the Foreign Currency adjusted by
adding interest with respect thereto at the Variable
Rate from the Settlement Date to the Close-Out Date,
into US Dollars at a rate of exchange at which the Bank
can buy or sell US dollars with or against the Foreign
Currency for delivery on the Close-Out Date.
(ii) CLOSING GAIN OR LOSS. (1) For a FX Transaction for which
the Bank agreed to purchase a Foreign Currency, the
amount by which the Closing Value exceeds the Notional
Value shall be a Closing Loss and the amount by which
the Closing Value is less than the Notional Value shall
be a Closing Gain; and (2) For a FX Transaction for
which the Bank agreed to sell a Foreign Currency, the
amount by which the Closing Value exceeds the Notional
Value shall be a Closing Gain and the amount by which
the Closing Value is less than the Notional Value shall
be a Closing Loss.
(iii) NET PRESENT VALUE. The Closing Gain or Closing Loss for
each Settlement Date falling after the Close-out Date
will be discounted by the Bank to it net present value.
(iv) PAYMENT. To the extent that the net amount of the
aggregate Closing Gains exceeds the Closing Losses, such
amount shall be payable by the Bank to the Borrower. To
the extent that the aggregate net amount of the Closing
Losses exceeds the Closing Gains, such amount shall be
payable by the Borrower to the Bank.
7.6 NON-EXCLUSIVITY OF REMEDIES: Exercise one or more of the Bank's rights
set forth herein or seek such other rights or pursue such other remedies
as may be provided by law, in equity or in any other agreement now
existing or hereafter entered into between the Borrower and the Bank, or
otherwise.
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SECTION
8
MISCELLANEOUS
8.1 AMOUNTS PAYABLE ON DEMAND: If the Borrower shall fail to pay on demand
any amount so payable under this Agreement, the Bank may, at its option
and without any obligation to do so and without waiving any default
occasioned by the Borrower having so failed to pay such amount, create
an Advance under this Agreement in an amount equal to the amount so
payable, which Advance shall thereafter bear interest as provided
hereunder.
8.2 DEFAULT INTEREST RATE: If an Event of Default, or an event which, with
notice or passage of time could become an Event of Default, has occurred
or is continuing, the Borrower shall pay to the Bank interest on any
Indebtedness or amount payable under this Agreement at a rate which is
5% in excess of the rate or rates then in effect under this Agreement.
8.3 RELIANCE AND FURTHER ASSURANCES: Each warranty, representation,
covenant, obligation and agreement contained in this Agreement shall be
conclusively presumed to have been relied upon by the Bank regardless of
any investigation made or information possessed by the Bank and shall be
cumulative and in addition to any other warranties, representations,
covenants and agreements which the Borrower now or hereafter shall give,
or cause to be given, to the Bank. Borrower agrees to execute all
documents and instruments and to perform such acts as the Bank may
reasonably deem necessary to confirm and secure to the Bank all rights
and remedies conferred upon the Bank by this agreement and all other
documents related thereto.
8.4 ATTORNEYS' FEES: Borrower shall pay to the Bank all reasonable, actual,
out-of-pocket costs and expenses, including but not limited to
reasonable attorneys fees, incurred by Bank in connection with the
administration, enforcement, including any bankruptcy, appeal or the
enforcement of any judgment or any refinancing or restructuring of this
Agreement or any document, instrument or agreement executed with respect
to, evidencing or securing the indebtedness hereunder.
8.5 NOTICES: All notices, payments, requests, information and demands which
either party hereto may desire, or may be required to give or make to
the other party hereto, shall be given or made to such party by hand
delivery or through deposit in the United States mail, postage prepaid,
or by facsimile delivery, or to such other address as may be specified
from time to time in writing by either party to the other. Such notice
shall be deemed given upon receipt by the other party.
TO THE BORROWER: TO THE BANK:
VOLCOM, INC. BANK OF THE WEST
1740 Monrovia Avenue Newport Beach Office (CBC)
Xxxxx Xxxx, XX 00000 0000 XxxXxxxxx Xxxxxxxxx, Xxxxx 000
Attn: Xxxxxxx Xxxxxxx Xxxxxxx Xxxxx, XX 00000
CFO Attn: Xxxxx XxXxxxxxxx
Vice President
FAX:
FAX:
8.6 WAIVER: Neither the failure nor delay by the Bank in exercising any
right hereunder or under any document, instrument or agreement mentioned
herein shall operate as a waiver thereof, nor shall any single or
partial exercise of any right hereunder or under any other document,
instrument or
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agreement mentioned herein preclude other or further exercise thereof or
the exercise of any other right; nor shall any waiver of any right or
default hereunder, or under any other document, instrument or agreement
mentioned herein, constitute a waiver of any other right or default or
constitute a waiver of any other default of the same or any other term
or provision.
8.7 CONFIDENTIALITY: The Bank shall treat all financial statements, reports
and other information required to be disclosed by Borrower to Bank under
the Agreement as confidential. The Bank shall make no disclosure of such
information to any person other than to the Bank's external auditors and
state and federal examiners and regulators and except as may be required
by law, rule, regulation or government agency or in connection with any
action to enforce this Agreement if such information is relevant and a
protective order satisfactory to Borrower is in effect.
8.8 CONFLICTING PROVISIONS: To the extent the provisions contained in this
Agreement are inconsistent with those contained in any other document,
instrument or agreement executed pursuant hereto, the terms and
provisions contained herein shall control. Otherwise, such provisions
shall be considered cumulative.
8.9 BINDING EFFECT; ASSIGNMENT: This Agreement shall be binding upon and
inure to the benefit of the Borrower and the Bank and their respective
successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the
prior written consent of the Bank. The Bank may sell, assign or grant
participation in all or any portion of its rights and benefits hereunder
with the consent of the Borrower.
8.10 JURISDICTION: This Agreement, any notes issued hereunder, the rights of
the parties hereunder, and any documents, instruments or agreements
mentioned or referred to herein shall be governed by and construed
according to the laws of the State of California without regard to
conflict of law principles, to the jurisdiction of whose courts the
parties hereby submit.
8.11 TELEPHONE RECORDING: The Borrower agrees that the Bank may
electronically record all telephone conversations between the Borrower
and the Bank with respect to any FX Transaction and that any such
recording may be submitted in evidence in any arbitration or other legal
proceeding. Such recording shall be deemed to be conclusive evidence as
to the terms of any FX Transaction in the event of a dispute.
8.12 COUNTERPARTS: This Agreement may be executed in any number of
counterparts and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
8.13 HEADINGS: The headings herein set forth are solely for the purpose of
identification and have no legal significance.
8.14 ENTIRE AGREEMENT AND AMENDMENTS: This Agreement and all documents,
instruments and agreements mentioned herein constitute the entire and
complete understanding of the parties with respect to the transactions
contemplated hereunder. All previous conversations, memoranda and
writings between the parties pertaining to the transactions contemplated
hereunder not incorporated or referenced in this Agreement or in such
documents, instruments and agreements are superseded hereby. This
Agreement may be amended only by an instrument in writing signed by the
Borrower and the Bank.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first hereinabove written.
BANK: BORROWER:
BANK OF THE WEST VOLCOM, INC.
BY: /s/ Xxxxx XxXxxxxxxx BY: /s/ Xxxxxxx Xxxxxxxx
----------------------------------- --------------------------------
NAME: Xxxxx XxXxxxxxxx, Vice President NAME: Xxxxxxx X. Xxxxxxxx, President
and CEO
BY: /s/ Xxxxxxx Xxxxxxx
--------------------------------
NAME: Xxxxxxx X. Xxxxxxx, CFO and
Secretary
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